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Use public money to bring new car buyers back to forecourts, Government urged

Published 05 February 2018

Automotive industry commentators are calling for Government action after new car sales fell for the 10th consecutive month in January.

Demand for new cars dropped by more than six per cent in January 2018, with 10,949 fewer vehicles leaving showrooms compared to the same month in 2017.

The negative figures have been labelled as 'bleak' by those within the industry, with the AA calling for the Government to use public money to incentivise new car buyers back to showrooms. 

"This data is the first real temperature test of the overall health of the new car industry and it paints a fairly bleak picture," commented Simon Benson, of AA Cars.

"The Government needs to act now to incentivise new car buyers back to forecourts before this decline causes real damage."

"Our research suggests a lack of consumer confidence cost the industry an estimated £2.6 billion in 2017 alone. The Government needs to act now to incentivise new car buyers back to forecourts before this decline causes real damage."

Business and private sales fell by a respective 29.7 and 9.5 per cent in January, with manufacturer-backed scrappage schemes failing to convince owners to trade-in their old car for a new model.

As in previous months, registrations of new diesels fell heavily, with a 25.6 per cent drop in January. However, petrol sales rose by a modest eight per cent while alternatively fuelled vehicles – electric and plug-in hybrid – increased by 5.5 per cent.

Yet, despite the increase in demand for electric and hybrid cars, their collective 9020 sales failed to plug the 20,000+ new car black hole that has been created by the mass exodus from diesel. 

The SMMT - the body that represents car manufacturers and dealers - is once again calling on the Government to change its policy

"Given fleet renewal is the fastest way to improve air quality and reduce CO2, we need Government policy to encourage take up of the latest advanced low emission diesels as, for many drivers, they remain the right choice economically and environmentally," says SMMT Chief Executive, Mike Hawes

Comments

   on 5 February 2018

I just don't believe this d*****, car sales in January 2017 would have benefited from the looming tax changes in April 2017. Plus the reputation of diesel cars goes before them, they are unreliable and expensive to repair as well as emitting noxious fumes which adversely affect those humans who have breathing difficulties or suffer from heart defects. Surely the head of the SMMT and spokesperson for the AA realise the inherent problems surrounding diesel power units. Never believe industry mouthpieces!

signman    on 5 February 2018

I agree with the OP, but I am now one of those with a 2016 Euro 6 diesel who will strongly consider keeping it for longer than I had originally planned as the new VED regime from April already prejudices an early change.
I had a 2014 Euro 5 diesel before and was pleased to upgrade after 20 months of a 36 month pcp for a cleaner Euro 6.....but no such incentive exists this time around and my car is worth less than I might have expected so it is better to keep for another year and consider options then......much to the cost of the environment and SMMT members it would seem!

Rob. S    on 5 February 2018

I bought a new BMW 320d Efficient Dynamics in 2013 on the advice given out by the last Government. Recently I have seen my expensive car demonised. Never again will I take advice from the Government or the automotive industry

   on 5 February 2018

Let’s see, should I buy a new car which incurs £140/annum road tax or keep driving my old car which costs £20/annum? Between that and the fall in Sterling pushing up the price of new car imports, it’s hardly a tough decision, is it?

Norman Foster    on 5 February 2018

Fewer new cars on our roads? Excellent!

Norman Foster    on 5 February 2018

Fewer new cars on our roads? Excellent!

Norman Foster    on 5 February 2018

Fewer new cars on our roads? Excellent!

   on 5 February 2018

Any incentive to increase the sales of new cars is most welcome,provided it is limited to cars built in the UK by British workers who pay National Insurance,and Tax in this country, and spend their earnings here. Imported cars increase our Balance of Payment Deficit which in turn leads to more Government borrowing and therefore
interest payments of many tens of millions of pounds,which would be better used to
provide services in this country Common sense really

Richard Acland    on 5 February 2018

Am I the only one not to be surprised. To buy an average saloon car you need in the region of £15,0000. To buy any thing above average you are talking £20,000 plus.
As a person of modest means I find this to be a considerable amount of money.
I am sure I am not the omly one that finds the prospect of owning a new car well beyond my means.

Ronj    on 5 February 2018

Are you suggesting that motor manufacturers and organisations such as AA take over government? Surely the government are factoring in the effects of their actions and maybe do not wish to declare their intent of reducing cars on the road. We need to reduce traffic both for congestion and pollution.

Aaron Preston    on 5 February 2018

I really don't see the value in buying a new car off the showroom as the amount of money you loose when driving out the showroom is crazy. Leasing is a better way if you want to avoid depreciation but pick the cars that hold their value well as the lease price will generally be cheaper, so for example a Toyota will be cheaper to lease and have a higher used price than an Alfa Romeo which are expensive to lease as they have a lower resale used price value. If you still wish to purchase a car then 6 month used or pre-reg is the way to go as the deals are far greater than new (unless you are doing a finance offer/PCP). I don't have any sympathy for the showrooms as a lot of cars are over priced for what they are, and the margins some of the showrooms operate to are scandalous (depending on brand). As others have said to buy an above average car is over £20k and to most people that is a lot of money. Personally I wouldn't buy a car over that price as you can get brilliant used cars under £15000 which will last you for years and warranty intact. I do feel for diesel car owners as the 2nd hand car market on these cars has nose dived and the government covering scrappage schemes on new cars still doesn't make sense to think "oh I know they are offering me £2000 scrappage against a new car but I have to spend £20000, wow that's a great deal!" Is it? I think not. It is similar to some stupid adverts from car dealers saying "beat the car tax increase and order your new car now" So that's an incentive to sell my 5 year old car (or trade it in) and buy a brand new car that depreciates straight away and costs £15k + just to save £140 a year. Are people that simple?? I can see the lease market really picking up more over the next few years in the UK, similar to how popular it is in the US, as consumers want one price a month and not have to worry about anything but it depends on the deal as the depreciation is factored into the lease cost so there are more used car lease deals available which make more sense as they are 6 months old and the price would have been reflective of the initial 6 month depreciation. Better option then buying a new car every 3 years in my book as they are too expensive.

Edited by Aaron Preston on 05/02/2018 at 13:39

soldierboy000    on 5 February 2018

The government should do this the government should do that don't these people realise that the government is spending our money. I don't see why my money should be spent on helping some person buy a car at a cheaper price to keep the motor industry alive, especially when the motor industry is so transfixed on inventing more add ons at cost to the buyer that did very well without them before. I aim my comment at things like cameras all around the car and lane departure prevention etc. all things a competent driver should be able to control himself. Dacia have got it right, you work out the difference.

dobble    on 5 February 2018

Where's the incentive my current car, a Toyota hybrid, has zero road tax. If I replaced it I would have to pay £135. Might as well keep the old one.

Miniman777    on 5 February 2018

Why should the Government prop up what is private enterprise, just because they are not selling enough cars.

At present I've a company car (diesel and that fuel was enforced by the finance director), it's my third consecutive diesel and when I do take retirement and hand it back, my own-bought replacement wont be diesel. That's not just because of the Dieselgate scandal, but having paid for a replacement DMF and clutch on a previous car, and now with even more complex emission control that fails/goes wrong and costs to fix, forget it.

That said, trying to find a replacement that ticks my boxes is a tall order - SUV body, petrol, 0-60 in 9 secs or less, manual box, plus nicities of heated leather seats, pan roof etc. I looked at hybrid and was underwhelmed with dull and bland options that can do 30 miles on battery. Sorry, but if I am forking out upwards of £30k for my last ever car, 30 miles plus the weight penalty that give low mpg on petrol, isnt worth the biscuit.

Manufacturers have caught a cold with diesel, have been slow to adapt and offer pathetic low cc turbo-powered petrol units. Even newer petrols sometimes dont have the same 0-60 as past models, Mazda's CX5 being and example in a bid to improve economy.

With motorists being brainwashed to not buy diesel over the past 10 year, worries over Brexit (lets not forget Sunderland, home of Nissan voted leave), job losses/short time and concerns over being trapped up in a PCP for the rest of your life, is it any wonder dealer forecourts are bursting at the seams with used cars, predominantly diesel, they cannot shift? And they seem to be hanging on to prices as long as they can knowing a bigger dive in the market is months away.

As an example, Jaguar, on its own approved site, has 1070 diesel XEs against just 160 petrols for sale; 398 F-Pace diesels and 39 petrol, and I think this 80/20% diesel/petrol split is quite widespread.

The motor industry didn't see the diesel backlash coming and has fallen into a rather large hole.
Should we really have any sympathy or shed a tear after the way manufacturers have lied and cheated customers, wormed their way out of warranty claims and encouraged their dealers in a similar way to continue the rip-off practice?




Miniman777    on 5 February 2018

Why should the Government prop up what is private enterprise, just because they are not selling enough cars.

At present I've a company car (diesel and that fuel was enforced by the finance director), it's my third consecutive diesel and when I do take retirement and hand it back, my own-bought replacement wont be diesel. That's not just because of the Dieselgate scandal, but having paid for a replacement DMF and clutch on a previous car, and now with even more complex emission control that fails/goes wrong and costs to fix, forget it.

That said, trying to find a replacement that ticks my boxes is a tall order - SUV body, petrol, 0-60 in 9 secs or less, manual box, plus nicities of heated leather seats, pan roof etc. I looked at hybrid and was underwhelmed with dull and bland options that can do 30 miles on battery. Sorry, but if I am forking out upwards of £30k for my last ever car, 30 miles plus the weight penalty that give low mpg on petrol, isnt worth the biscuit.

Manufacturers have caught a cold with diesel, have been slow to adapt and offer pathetic low cc turbo-powered petrol units. Even newer petrols sometimes dont have the same 0-60 as past models, Mazda's CX5 being and example in a bid to improve economy.

With motorists being brainwashed to not buy diesel over the past 10 year, worries over Brexit (lets not forget Sunderland, home of Nissan voted leave), job losses/short time and concerns over being trapped up in a PCP for the rest of your life, is it any wonder dealer forecourts are bursting at the seams with used cars, predominantly diesel, they cannot shift? And they seem to be hanging on to prices as long as they can knowing a bigger dive in the market is months away.

As an example, Jaguar, on its own approved site, has 1070 diesel XEs against just 160 petrols for sale; 398 F-Pace diesels and 39 petrol, and I think this 80/20% diesel/petrol split is quite widespread.

The motor industry didn't see the diesel backlash coming and has fallen into a rather large hole.
Should we really have any sympathy or shed a tear after the way manufacturers have lied and cheated customers, wormed their way out of warranty claims and encouraged their dealers in a similar way to continue the rip-off practice? Tough, innit?



Diggerssenior    on 5 February 2018

And here we are in the 6th largest economy in teh world, thriving and booming and the Governement is expected to back the car industry. What a joke. The car industry needs to up its games, lower its prices and stop being so dividend orientated.

Hugh Bennet    on 5 February 2018

Why should public money be used, I don't want to pay for anybody elses car? The manufacturers already price cars more in the UK than they do in other countries, so let them bring the prices down to attract buyers. May also slow down imports of cars not built in the UK.
This is a normal market and manufacturers cannot expect their sales to keep rising every year. Will do them the world of good to get back to reality. New cars are more reliable and do not need to be changed so often.
Recent inovations like PCP have helped but now is about to backfire as people realize the costs and the consequences of not trying to own their car.

jchinuk    on 5 February 2018

I don't think that car sales are helped by the number of models in many marques that are only available with a diesel engine or only available in certain trim levels with a diesel unit.

Whatever the truth about the cleanliness or otherwise of diesel engines, the name is now tarred with the brush of being dirty, unreliable and a pain to own, even the 'Fleet Street' press is carrying stories of unhappy owners suffering from DPF failure or not being aware of the recycling process and the need for longer runs to clean the DPF.

It will take a while before the image of diesel recovers, by all accounts Skoda make excellent cars these days, but the jokes from the 70s are still told.

Dr Robert Taylor    on 5 February 2018

I have never bought a new car and never will - my hobby is renovating 'Classic' cars and so have no difficulty in keeping my modern everyday car in tune and running well. Although it's 12 years old it is only slightly less 'green' than the latest crop of cars so when people suggest that I should take advantage of a scrappage scheme to get a new car I point out that they don't factor in the energy used in the production of a new car, the smelting of the steel and aluminium, the rolling into sheet and the pressing and painting of panels and other production costs so it would take a very long time to 'out green' my present car by buying a new one.

   on 5 February 2018

Never mind government money. The manufacturers need to stop ramping up prices way ahead of inflation.

Robbutt    on 5 February 2018

I feel any incentive to buy a new car should first come from the manufacturers, if you are not selling them at the price offered LOWER the price, its simple economics. It seems new car buyers have ignored the list price and been blinded by the monthly cost. Also I would be against any incentive from the Government to buy anything from the VW group after the latest news surrounding how they have used monkeys for testing emissions. However we have seen little outrage by any motoring magazine or newspapers who all too often rely on the VW group for advertising revenue. For the time being I am happy to keep our petrol Qashqai (2011) for the foreseeable future (next 5 years) and keep swapping my local run around currently a ford focus that has already covered 146,000 miles. My next runaround will be a ford Galaxy TDI with 165,000 miles on the clock once I have cleaned all the gunge out of the EGR valve I plan to run it to see if everything they say about diesels is true!

retiredspeedmerchant    on 6 February 2018

Totally wrong. The government should not subsidise car manufacturers. UK prices are still higher than the rest of Europe. When the UK finally gets out of the EU, those manufacturers in the UK stand to gain. I agree with the many previous comments about the diesel farce, I had the misfortune to take delivery of my new diesel last April. It's now worth 50% of its cost. Will I be changing it? No. Do I intend to keep it far longer? You bet I do.

Murray Snudge    on 6 February 2018

I drive a 1991 Ford Escort diesel and will continue to do so. It has no DPF and no dual-mass flywheel so very reliable.
I also get almost 60mpg

aethelwulf    on 6 February 2018

I think the consensus here is a clear no. I saw this coming last year when many were buying cars to get the low VED bands and who blames them?. I was caught when I bought back in 2005 a petrol Mondeo with a 2 L engine and then the VED banding was altered and I now pay £280 a year. Still worth keeping as the car is reliable and has no complicated bits of diesel to go wrong. It does have a DMF but on petrol cars these last a very long time.
So for me to buy a new car I would say I will wait until mine wears out and not be influenced by token offers on scrappage schemes. Anyway my old Mondy estate is more powerful than the small lawnmower engined Mondeos they sell now.

Idunnoatall    on 6 February 2018

I have a CR-V 1.6 Diesel with an auto box. As I was off sick I was able to do extensive research into both diesel vs petrol as well as torque convertor vs DSG/Powershift. I had to have a car that could be adapted for hand controls so Auto was a must. Torque convertor boxes, though complicated are simpler (!) than a DSG type but nowadays are difficult to find.The CR-V fits the bill nicely and carries Honda's reputation for reliability.......

I haven't delved too deeply into diesel vs petrol but even my limited filter of news about each type suggests both come out even in terms in pollutants (though different in type) so as far as I'm concerned you makes your choices.

I also use premium diesel which hurts financially but which should help preserve the expensive bits and make sure it gets a decent run to clear the DPF but not thrashed - Its difficult to get over 2500 revs. My neighbour runs a Citroen Diesel for his business and generally gives it a blast on the local duallie when he gets the DPF light on.

marcus gault    on 7 February 2018

Meh! I only got one more car to buy before my driving days are over. Hopefully a self-driving one to facilitate pub visits, without walking. Dont give a fig about the fuel. Anyway, I predict there will, relatively soon, essentially only be one liquid fuel, perhaps akin to Kerosene?

Since modern engines appear to be on a convergence course, well leastwise the so-called petrols are using a combination of compression and spark ignition, so what odds whether fuelled by petrol or diesel.

cheers mth

Edited by marcus gault on 07/02/2018 at 17:44

glidermania    on 9 February 2018

Diesels are not unreliable. That statement is pure nonsense. Never believe ranting eejits either!

Facts is, the government has screwed up the VED on new cars since April 2017. That discourages people to buy new. Second, the irresponsible demonisation of diesels has clearly hit sales (see OP's 'rant.'. The latest EU6 means new diesels are actually cleaner than many petrol cars.

Third, the Government anouncement to phase out IC engine cars for electric \ hybrid vehicles has confused people even if this proposed change is decades in the future (see numerous questions in HJ's column about the 'change over').

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